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tv   First Business  KICU  February 11, 2013 4:00am-4:30am PST

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a snow show on wall street. will trading volumes drop due to the massive storm in the northeast? in today's cover story, automakers scramble to get a grip on the new generation of car buyers. plus, what yet another merger in the airline industry means for business travelers. and, why more americans are just saying no to french fries. first business starts now. you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's monday, february 11th. i'm angela miles. in today's first look: fallout from the snow storm and the dow's continuing flirtation with 14,000 will be in focus. the dell deal could be in jeporady. the largest shareholder in the pc company wants a fight because the company may be worth $24 per
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share. the current agreement is around $3. and gas prices are up a dime since last week. regular unleaded in $3.56 per gallon on average. tim mulholland of china america capital joins us on this monday morning for a closer look at the markets. we have to talk about the snow situation. how did it affect the market even on friday? > > on friday we saw such a sharp drop-off in volume. the market in general, volume has been nothing to really write home about, because it has been subdued. and that usually happens in this low-volatility kind of one-way street, non- eventful marketplace. so, when you get a weather concern, it is even less of an incentive for traders to participate in the market. so, a drop off in volume is really a natural occurrence in this environment. > you are just back from china. what did you find there? > > lots of pollution. i was in
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beijing for two days. i have been in china numerous times, and this was by far the worst i've ever seen it. but, aside from that, you look at the economy, things are moving. it is bouncing right along, and they are rebalancing the economy. you can see the service sector, the financial sector, different things moving. so i think in general things are moving in china. there is still a lot to be done and a lot of reform to be done, not the least of which is clean air and clean water. but i think these are things, initiatives to look forward to, and other than that, i think china is moving as expected, if not better. > we will take out our pollution put there tim. and what about the united states? what worries you about the market here? > > you know, not a lot worries me right now in this market. it is liquidity-driven. the fed is buying 80% of the treasury, which is unbelievable. i never thought i'd see that. so i think as long as that occurs, and that's occurring, and there's no riot in the bond market, if
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you will, then i think the market looks like it is poised to challenge its all-time high - that's the s&p. small caps and mid-caps already have. the dow is about to. why not the s&p? liquidity-driven market, i don't try and rationalize too much other, but i don't really want to participate in the downside until i see some kind of divergence or something to hang my hat on. > thank you tim. millenials comprise "the lost generation." less interested in cars than previous generations at about the same time prices for gasoline and cars themselves went up. as our cover story explains, then came computers, cell phones and, by the time auto makers realized all this, they had a problem - how to win them back. move over boomers. car-makers are now targeting millennials, the population roughly 18 to 35. "it's the most important segment for all car-makers. internally at ford, we're always talking about millennials." "gas mileage matter? yes. every time i fill up, i cringe." "i definitely think green is the next big thing. more electricity, things like that." which is why you're seeing even
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cute little smart car debut an even smarter version - all electric - at the chicago auto show. it'll be available this spring. but some millinnials need more than two seats. "i have many millennials in my family and they travel in packs. they have lots of distractions - computers, video games, iphones - and they socialize online rather than drive somewhere to hang out." dodge dart is aimed at millennials, with computers running software that may be updated as easily as your smart phone. "the beauty of this system is that it's expandable. in the old days, you'd build a car and it's obsolete. these days, we can come in with new sofware and download them." but if you still crave adrenaline from your morning commute, try the ford fiesta st race car. debuted in chicago... modified to inspire. "this car can do zero to 60 in two seconds. it'll fly through the air four or five meters, no
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problem." ericksson says you may not need to leap gaps of several feet on your way to work, but the whole "pocket rocket" thing is about bolstering the image of cars as small but very powerful. merger news is anticipated today that could further consolidate the airline industry. reuters reports creditors for amr are meeting today and could vote on a potential deal between american airlines and u.s. airways. the boards of both of those carriers may also vote on merger today. the marriage of the two airlines means less competition between major carriers, following mergers between u.s. airways and america west, delta and northwest, contiinental and united, and southwest and airtran. "well, it's the business travelers who are the most nervous here. on the liesure end there's some much diversion to discount airlines. but you take places like philly, new york out east, there's a lot of
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concentration there and there could a few effects." that was depaul economics professor joe schwieterman. he does not foresee regulatory obstacles for amr and u.s. airways to merge. boeing is giving its customers a heads-up that dreamliner arrivals will likely be delayed. manufacturing on the troubled aircrafts will continue, but boeing has said deliveries that were expected in the near future are either delayed or at risk of being delayed. some carriers such as norwegian air are giving customers the option of changing flights to later dates. the dreamliner has been grounded since january 16th. the faa is still investigating the aircraft's battery issues. your tax refund may be delayed, and the heming and hawing by lawmakers in washington over the fiscal cliff is blamed. according to reports, the irs had to wait out the standoff to deterime the exact policy and print the appropriate forms. the delay in getting americans their refund
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tax money could also take longer to give the economy a boost. the average refund is around $3,000. traders are bracing for news out of europe this week. eurozone finance ministers meet today in brussels, and later this week g-20 finance ministers meet in moscow. just last week the european union wrapped up a budget deal after 24 hours of negiotiating. in an historic move, the region decreased its budget for the first time since the e.u. began. leaders cut the budget to 960 billion euros over a span of 7 years, down from an earlier proposal of 1.03 trillion euros. a company with ties to the housing crisis is setting for an ipo. pennymac financial service, started up 5 years by the former president of countrywide financial. standford kurland resigned from countrywide in 2006. countrywide was blamed for risky lending practices and billions of dollars in defaults on subprime loans and was later acquired by bank of america. the new company kurland runs, pennymac, creates,
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buys, sells and services home loans. entergy stock lost power after the superbowl blackout last week, but earnings are energized. entergy's fourth quarter earnings nearly doubled on lower income tax expenses. shares dimmed during the week after a power failure cut lights in about half of the stadium for 34 minutes. entergy said the problem was caused by a faulty relay in its switching gear. the problem has been resolved. entergy closed down 49 cents at $64.47 on friday. hp wants its pcs to become more politically correct. the computer maker is promising to crack down on chinese suppliers who use low-paid student interns and temp workers to save money. the new standard follows revealtions that chinese manufacturer foxconn, which is used by hp, admits to hiring interns as young as 14.
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new projections show fewer people will get health insurance through their employer as so called "obamacare" takes effect. the cbo projects more americans will move toward state-based health programs and away from employer health insurance. "obamacare" is projected to draw more workers searching for healthcare. the number of people participating in those exchanges is expected to grow from 7 million in 2014 - the first year they'll be available - to 24 million in 2016, according to the congressional budget office. america's favorite side order is being pushed to the side. according to research by the hudson institute, diners are consuming fewer french fries. "we analyzed the key restaurants that sell more than 20% of their business in fries, and we learned that there were 50 million less servings over a 5-year period than in 2006. so we want our fries, but we don't necessarily want as many fries." the study also notes that many customers are switching to
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healthier options. since those often come with a larger price tag, the trend is providing a boost to fast food restaurant profits. slow consumer spending in europe and asia took a bite out of sales at mcdonald's. mcdonald's global sales fell by 1.9% in january. in the u.s., sales were up by .9%, getting a boost from the grilled onion cheddar burger on the dollar menu. the chain also shifted its mcrib offering to december and encouraged restaurants to stay open on christmas day. the agency that oversees food standards in britian is testing all processed food because of a horse meat scandal. last week, reports surfaced that frozen lasagna labeled as beef was actually horse meat in some cases. horse meat isn't necessarily dangerous, but because it was labeled as beef, there may be criminal charges involved. relationship rentals are on the rise in china. due to dateor thr
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and valentine's day, there's a website where the service is especially popular with woman, as searches for "rental boyfriend" are up by 884%. renting a beau for the day costs around $50, but prices can increase, especially if they are meeting the parents. investors are waiting to find out if they will pick up a larger slice of apple. the tech company is dealing with complaints from share holders about its excessive stash of cash. this week apple wraps up returning $45 billion to investors. the iphone maker signaled last week it's considering sharing more of its wealth. apple has $137 billion in cash on hand. still to come, with fuel efficiency in the spotlight, how will consumers adapt to the changing habits of automakers? that's later. but first, if you are a listmaker, we have startling news for you. bill moller joins us after this "in the know" message.
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you're busy beyond belief. so what do you do to get through the day? you have your daily to-do list, of course. just check off the tasks as each one gets done. but you know, there may be a better way to organize your day. through writing, consulting and speaking, barry molz helps businesses large & small get unstuck, and you have been doing some reading and thinking about this. what's wrong, barry, with the list method?
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> > well, to-do lists are just all nonsense, bill. what do you do? you get your to-do list, and at the end of the day, what do you do? maybe you've checked a few things off, but then you just keep re-copying it over and over again every single day, and it makes you feel bad. you don't really get anything done. you are busy, but not productive. > kind of a slave to the list. > > it is, of course! > so, what is the better way? > > the first thing to do is, the night before, think about the two things that you want to get done the next day before you do anything else. what is in the critical path of your success for that day? > the most important things or the most challenging things? > > things that are going to be critical to your business the next day. and you have to do those two things before you turn on your e-mail, your voicemail, and your social media feeds, because, i have to tell you, we live in an interruption- based culture, and those things just get in the way. > all right, so, i have identified the two things i need to do. then what?
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> > you do those things to the fullest, and then you can start looking at your list. but at the end of the day, don't carry your list from day to day. the next day, after you get those two things, what is in your mind that you actually need to do? because then you are just a slave to your list, and those things really aren't important if they stay in your list day after day after day. > so you are sort of dividing the day into sections and then matching each section with a priority? > > absolutely. and think about, when is your energy the best for that particular activity? sometimes people are really good in the morning, some people are good in the afternoon. when is the best time to return phone calls? but don't let interruptions get in the way. you drive your day, don't let your day drive you. > it's hard to do, though, isn't it, because that little smartphone on the desk is screaming at you to pay attention to it. > > exactly. it is beeping and buzzing and whizzing. it is making all sorts of sounds. in fact, when it rings, it plays your favorite song. > it knows how to get to me. barry molz, thanks so much. > > thank you. still ahead, automakers are making an aggressive push to design greener cars. but is it too little, too late? that's next.
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th a deadly disease. i was one of them. i'm a nurse and i knew how damaging
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the disease was to my life. nothing i tried seemed to work. my brother died. from complications of the exact same preventable disease and i knew i had to do something to get healthy. my disease was obesity and after consulting with my doctor, i received the effective treatment i needed. obesity is a second leading cause of preventable death in the united states. but it's a treatable disease, and there's effective treatment options available. now is time to get help. please join the obesity action coalition and acknowledge obesity as a disease for acceptance, for access to all effective treatments, including diet and exercise, pharmacotherapy and weight-loss surgery for obese adults with at least one obesity related comorbid condition. visit obesity action dot org and sign an open letter pledging your support and for more information about how to talk to your doctor about your weight and your treatment options. together we can make a choice to end obesity now. a public service from the obesity action coalition. car companies are making a sharp
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turn toward clean fuels. joining us this morning from the chicago auto show, gm's head of consumer affairs, james bell, and cars.com executive editor joe wiesenfelder. good to have you guys on the show. > > thanks. > jim, i know you're here to talk about your new car. what do you have to show off today? > > this is the chevrolet cruze, which is probably very familiar to a lot of your viewers. it is a car that has been very successful on the road for almost three years now in the u.s. but it is what's under the hood that is exciting. we are
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now able to offer something that has been very popular - better than 50% market share in europe - which is a clean turbo diesel engine. for a lot of people that might be, "oh, diesel, that's loud and clattery and slow, right?" well, that is the whole point. these are now very modern, very computer- controlled, very efficient engines that produce a lot of power, and it really transforms the cruze from just being a great small car to now being one that is really going to be an aspirational car for a lot of people. > joe, jim just pointed out that americans are trying to keep up with what is going on in europe. but do americans want cars and trucks that use alternative fuels, or are we forever hooked on gasoline? > > gasoline will definitely dominate, i think, in the near and middle and probably far future. but, people like me, in my line of work, who review cars and drive all of the clean diesels, are fans of them. i have been a fan of diesel for a long time, and it is because it drives like a gas-powered car, or even better, quicker off the line, but is typically more efficient - 10, 20 percent more efficient. so, it is a bit of
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the chicken and the egg. do we have the cars, do we have the fuel? now what is happening is, clean diesels are starting to proliferate. they are now available in every state, which wasn't the case because they weren't clean enough until a few years ago. > mr. bell, what is taking so long? i know gm started with diesel fuel buses, i believe, years ago. where does gm now stand as far as the other automakers that are moving toward alternative fuels? > > we are kind of going at a broad spectrum of choice for consumers. so, we now have an electric car that doesn't even know what gasoline is for, the spark ev. you have the chevrolet volt, which a lot of people are familiar with, which drives like an electric car and then has a small gasoline engine to provide extra distance and charging as a generator, if you will, to get you on longer trips. we have other versions of hybrids that can also provide better fuel efficiency. and then we have this to provide really something that is mostly suited
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for people who are on long kind of highway distance runs. that is where diesel really shines. if you are in a city environment just doing small little trips, electrified vehicles are going to be best for you. if you're out on the highway being the road warrior, then clean diesel is the step. so, from gm's perspective, it is all about providing that choice. take a hard look at what you're doing with your car - what kind of vehicle do you really need? - and then find the propulsion that meets that need. > all right, we have to run. good to have you both on the show today. > > thank you. > > thanks. coming up, stay with us as we connect with a trader's play in linkedin.
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andrew keene joins us now for chart talk to talk about linkedin. you are always looking for those parabolic stocks, and i think we found one. > > linkedin is quite amazing. they had earnings on friday. stock was off to the races. i like to use the at-the-money straddle to imply how much the option markets are implying the stock is going to move. the stock was trading around $124.
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i actually didn't have a position on it. i was trying to sell some bull put spreads i didn't get filled. that stock took off. it is implying a $10 move on earnings. stock took off and moved $27 to the upside. linkedin is in what i call "no man's land" up here, which means there has never been any short stepping into this stock, and also it is going to be where the buyers are going to come in. we saw recent resistance at $125. that should be support to the downside. also friday's low of $140 will become support as well. so i think linkedin can move much higher. i think it will get bought on the pullback. it doesn't have a short squeeze like green mountain and netflix, which are probably 30 to 40%. their short interest is only about 9%. so i don't think there is a short squeeze component. it is basically future earnings. they are doing what facebook can't do, and that is monetizing the mobile space. > also they picked up a lot of people hunting for jobs. they have found their niche andrew. if you had to put a price tag on this stock, what would it be
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right now? > > what is my time frame? is the first thing i would say. > let's give you a year. > > a year. i would say higher. i think it is going to be north of $200. this is a stock that i talk about on the show a lot. i talk about facebook not being able to monetize their mobile. linkedin is the only social media stock that hasn't tested their ipo price. it ipoed $60, went to $80 that day, and it's been straight. if you look at the chart, this is the best chart. from bottom left to top right, it looks very, very good. facebook weak. you see pandora down. you see groupon lower. you see all these social media stocks except linkedin from the bottom left to the top right. means that people are always jumping to get long in this on a pullback. it seems like they're also taking people away from twitter. they are taking users from twitter. the linkedin platform in the mobile technology is really working well. year-over-year they doubled the amount of people that are going to be mobile space. > thank you andrew. > > thank you. that's it for now. coming up tomorrow, a fascinating glimpse into the first start-ups in silcon valley, and the surpsing ways the area as not changed since the '50s. from all of us at first business, have a good monday!

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